Can Music Sales Get Any Worse? Just Watch.

Earlier this month, the music business got a rare piece of good news: Apple announced that it had posted “record” sales at its iTunes music store around Christmas.

Now, back to our regularly scheduled programming: I’m seeing more and more evidence that Apple (AAPL) notwithstanding, the industry’s last few months were bad even by the industry’s own terrible standards.

Earlier this week, a music industry exec told me he thinks that the CD sales decline, which started nearly a decade ago, accelerated at the end of 2008: “[Retail] floor space shrank even more, [unsold CDs] came back even faster, everything got worse, faster,” he told me.

The newest data point: Awful results from Sony’s (SNE) third-quarter earnings report, which covers the last three months of 2008. The company’s Sony Music Entertainment label saw sales shrink 22 percent compared to the previous year due to the “accelerated decline in the worldwide physical music market resulting from the worldwide economic slowdown.”

It’s possible that we’ll see a bit of variation in results from the other big music labels–EMI Music Group, Vivendi’s Universal Music Group, and Warner Music Group (WMG)–based on the makeup of their artist rosters, etc. But the worrisome thing is that Sony’s arsenal included three of last year’s biggest stars: AC/DC, Beyoncé and Britney Spears.

So while it’s possible that Warner Music, which reports next Thursday, won’t have equally brutal results, it’s a fair bet that it will.

Sort-of-related point: If you have a couple minutes and are interested at all about what the music business might look like in the near future, check out this New Yorker interview with Muxtape creator Justin Ouellette.

Ouellette achieved a brief bit of Internet celebrity last year when his free music-streaming site caught on with the the Web cognoscenti, but then folded after receiving complaints from the music labels’ trade group. Now he’s back with a legal version of the site, which will have much smaller ambitions.

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